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Third party car insurance

A confident, smiling man behind the wheel of his car

When it comes to your car, you might think compulsory third party insurance (CTP) is enough to protect you financially (not to mention legally). But that's not necessarily true. 

But CTP green slips only cover physical harm to yourself and others injured in a car accident when you’re at fault.

What if you're also liable for repairing or replacing someone's car or property? Without financial protection, you'll be left with the bill. That's where third party insurance comes into play.

What is third party car insurance?

Third party car insurance covers damage you cause to someone else's vehicle or property.

For example, if you hit someone else's car in an accident and cause damage to their vehicle, third party car insurance may cover all, or part, of the costs to repair it, helping you avoid a hefty bill. 

However, third party car insurance does not cover damage you cause to your own vehicle. This might not be such a bad option if you have an older car that's not worth fixing, but want to avoid footing the whole bill of fixing someone else's wheels after an at-fault accident.

If you're looking for a policy that covers accidental damage you cause to your own car, look into comprehensive car insurance.

For those after a bit more coverage than standard third party policies, but don't want to fork out the extra premium to get a comprehensive car insurance policy, look into getting a third party fire and theft policy

Remember, third party car insurance policies, inclusions, and cover limits can differ between providers. So, make sure you read through each policy's product disclosure statement (PDS) before purchasing one. 

What does third party car insurance cover?

It won’t cover damages to your car, but it will cover the one or multiple cars you collide with. Your policy may even cover the damage caused to surrounding property. Again, remember there's a limit to the amount your provider will dish out can will likely differ between companies, and it may not cover all the costs in an at-fault accident.

Don't stress about hospital or doctors bills – your CTP is there to cover the cost of injuries to yourself and other others.

Third party car insurance vs comprehensive car insurance

Aside from the cost of a premium, these two types of car insurance differ considerably.

Third party car insurance 

This party car insurance cover is comparatively basic. It can cover the cost to repair other people's cars and property, if you're liable for an accident. 

However, there's a chance that it won't cover all of the damage done, depending on the policy's cover limits. For example, your third party policy may cover up to $5,000 worth of damage, while the actual cost to repair comes out at $10,000. 

Comprehensive car insurance

Comprehensive car insurance can cover damage to others' cars, as well as your own, if you're at fault for an accident. Cover limits can go as high as tens-of-thousands of dollars, depending on which policy you opt for. 

Comprehensive car insurance typically also has a range of inclusions which third party and CTP insurance do not offer, including optional extras you can tack on for personalised cover.

Before you buy a policy, it's imperative you read through the product disclosure statement (PDS), so you understand what a policy includes and, more importantly, what it doesn't. 

To explore all your options, make sure you compare comprehensive car insurance too, not just CTP and third party property. Take a look at some of the featured policies below, or read about the best car insurance in 2024. 

Jack Dona
Jack Dona
Money writer

Jack is RG146 Generic Knowledge certified, with a Bachelor of Communications in Creative Writing from UTS, and uses his creative flair to cut through the financial jargon and make home loans, insurance and banking interesting. His reader-first approach to creating content and his passion for financial literacy means he always looks for innovative ways to explain personal finance. Jack's research and explanations have been featured in government publications, and his work is regularly featured alongside major publications in Google's Top Stories for Insurance.

* Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.

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